Independent News & Media's largest shareholder, Denis O'Brien, has called for the resignation of chief executive Gavin O'Reilly after the publisher warned on profits for the second time in three months.

O'Brien has waged a long-running battle against the O'Reilly family, which bought into INM in the 1970s, warned that it is a "company in crisis".

"The board needs a radical overhaul with fresh blood required to make the necessary changes," he said, calling heavy cuts of 10% to 15% to "get the business back on its feet". "There is an added risk that the company will again encounter difficulties with its bankers".

"The announcement has resulted in a further erosion in shareholder value and I believe that the future of INM is more uncertain than at any time in its history," he said. "It is now incumbent on the board – at this late stage – to immediately address the issues which threaten the future of INM."

He said O'Reilly's position running the company is "untenable" as he has "presided over a near total collapse in shareholder value, and has lost the confidence of investors and the investment community".

In October INM announced the appointment of James Osborne, a director at Ryanair, as its new chairman.

He replaced Brian Hillery, who was criticised by O'Brien as not independent because of his strong relationship with the O'Reilly family, who announced his retirement.

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